JMMB Bank & EXIM Bank Forge Partnership to Increase Access to Financing for SMEs & Boost Export
JMMB Bank has forged a yearlong partnership with National Export-Import Bank of Jamaica (EXIM Bank) to increase access to financing to the small and medium-sized enterprise (SME) sector at more affordable interest rates, through a new loan guarantee initiative. In addition, this exclusive agreement is expected to boost export, as it is specially designed to support SMEs involved in the exporting of goods and services and its value chain.
The agreement, which was signed by both parties during a hybrid signing ceremony on June 2, will see EXIM Bank providing a partial guarantee of up to 80% of the loan amount, not exceeding J$10 million, but not less than J$5 million. SMEs can apply for these EXIM-backed loans, through JMMB Bank, with immediate effect.
In explaining more about the application process, Kevin Foreman, country SME relationship specialist at JMMB Bank, outlined, “The process would be similar to our current SME loan application, whereby we invite interested export-related SMEs to start a conversation with a JMMB Bank representative. This in-depth conversation allows us to better understand the client and his/her business and needs. We aim to make the process seamless, as such, we typically process the loan application, requiring minimal documentation, with a view to providing a conditional approval to our clients. This empowers our clients as it helps them in the decision-making process and saves them time and money.” The SME lead also noted that potential clients may be required to provide additional supporting documentation, on a case-by-case basis. The loan application process (up to conditional approval) typically takes a week, after submitting all the relevant documents.
Foreman also outlined, “This new agreement underscores JMMB Bank’s commitment and response to the needs of the SME sector, by increasing access to affordable financing, which is a challenge that SMEs continue to tout.” Adding, “Through this initiative, export-related SMEs can access working capital to boost their productivity, without the need for collateral, as the EXIM Bank will act as a guarantor for these loans. This will also enable these SMEs to access financing at lower interest rates, thereby increasing their profitability and competitiveness in the global marketplace.”
Lisa Bell, managing director of EXIM Bank shared, “Our aim is to delve deeper into the exporting sector and find ways in which we can better serve this group and to leverage emerging trends in areas like e-commerce which can help to catapult our exports into both existing and new markets. We are pleased that in this first phase that JMMB (Bank) has agreed to partner with EXIM as we work together to make this programme a success. We offer special mention to our partners at JAMPRO, and particularly the Export Max iii Programme, which continues to offer capacity building and market penetration support to export-ready firms, and other trade facilitation initiatives.” Adding, “It is of significance to highlight the resilience of our MSMEs within the Export Max Programme, as about 30% of these companies recorded significant increases in their 2020 export sales, when compared to 2019. This demonstrates that despite the disruptions presented by the pandemic, exporting is still a viable option for businesses in Jamaica”
Minister of Industry, Investment and Commerce, Hon. Audley Shaw encouraged small and medium-sized businesses to become a part of the formal sector in order to benefit from the opportunities like the JMMB Bank and EXIM Bank Export Guarantee programme, in addition to accessing the J$5 billion that the Prime Minister has announced through the Development Bank of Jamaica (DBJ for small and medium-sized enterprises (SMEs).
In his remarks during the launch of the Export Guarantee Programme, Shaw noted, “there are many opportunities and benefits that await you (SMEs) if you are a part of the formal sector…An estimated 40% of (businesses) are not a part of the formal sector which has several spill-off effects because they cannot access affordable financing and these opportunities…(therefore) there is a lack of high quality (product) output, lack of efficiency, low productivity…” As such, Shaw encouraged especially SMEs, to formalise their businesses so that they can access more affordable financing through these partnerships, government initiatives and technical support and thereby increase their competitive advantage. Adding, “It will give you a better chance to be more productive, to get more creative and to identify opportunities both on the local as well as international platforms.”
Strategic Thrust to Support SMEs
Jerome Smalling, CEO of JMMB Bank, during the launch shared that this sector has tremendous growth opportunity and, in leveraging further support to the sector, the JMMB Bank is seeking to play its part in helping SMEs to realize their full potential and contribute even more to the country’s development and economic recovery. “As such, we look forward to the impact that this win-win partnership with EXIM Bank will have for SMEs. This is the second such loan-agreement made within the last few months, having signed a US$35M agreement with IDB Invest, in January 2021, to increase long-term financing, over the next five years, to SMEs.”
In addition to increasing access to financing, the JMMB Bank, as part of its holistic approach to supporting the SME sector, provides a range of advisory services, through its SME Resource Centre, to ensure that businesses that need further assistance in order to qualify for these loans and other financing options, are able to put the necessary measures in place.
The JMMB SME Resource Centre, established in Jamaica and Trinidad & Tobago, is designed to help SMEs improve operational efficiency, lend expertise, and access resources, which will ultimately allow them to grow their businesses to the next stage of their life cycle. It provides coaching and a range of advisory services, including: marketing, taxation, accounting, business plan writing and other general financial management and back-office support, with the assistance of its partners and other organizations.
This move is in keeping with the JMMB Group’s strategy to add value to its SME clients, through the provision of financial partnership, resources, innovative financial solutions and a network, throughout these businesses’ life cycles; thereby, providing the necessary support for growth, and filling the gaps that currently exist in the financial sector.
Lisa Bell also expressed optimism that the success of this one—year programme with JMMB Bank will result in the expansion of similar opportunities and an expansion of the programme; thereby benefitting even more exporters. The Minister also reiterated a similar sentiment in his remarks as he looked forward to the programme’s success and the potential positive spill-offs for companies and the economy.